Income tax in Nepal

Taxation Researcher | March 13, 2019

INDIVIDUAL TAXATION

Residents are taxed on their worldwide income. Married couples may be taxed jointly or separately. Different tax rates apply to married couples filing jointly or separately.

INCOME TAX

Taxable income in Nepal includes (1) income from business, (2) investment income, (3) employment income, and (4) other income. Generally, net taxable income from each category is computed separately and then aggregated to arrive at the total net taxable income.

INCOME TAX 2014-2015 FOR INDIVIDUALS

TAXABLE INCOME, NPR (US$)
TAX RATE
Up to 350,000 (US$3,153)
0%
350,000 - 450,000 (US$4,054)
15%
450,000 - 2,950,000 (US$26,577)
25%
Over 2,950,000 (US$26,577)
40%
Source: Global Property Guide

INCOME TAX 2014-2015 FOR MARRIED
COUPLES FILING JOINTLY

TAXABLE INCOME, NPR (US$)
TAX RATE
Up to 400,000 (US$3,604)
0%
400,000 - 500,000 (US$4,505)
15%
500,000 - 2,500,000 (US$22,523)
25%
Over 2,500,000 (US$22,523)
40%
Source: Global Property Guide

RENTAL INCOME
Rental income from leasing property is subject to 10% withholding tax. This tax is credited to the taxpayer´s annual tax liability.

CAPITAL GAINS
Acquisition costs and related expenses are deductible when calculating taxable capital gains.

Capital gains realized from selling real property that are used in business are considered ordinary income and taxed at the standard income tax rates.

Capital gains realized from selling real property that are not used in business are taxed at a flat rate of 10%.


PROPERTY TAX


Urban House and Land Tax

The urban house and land tax is levied on the value of the property. Depreciation is taken into account, at rates ranging from 0.05% to 1.50% per year, depending on the type of construction of the house.

URBAN HOUSE AND LAND TAX

TAX BASE, NPR (US$)
TAX RATE
Up to 1 million (US$9,009)
nil
1 million - 2 million (US$18,018)
NPR300 (US$3)
2 million - 3 million (US$27,027)
0.05%
3 million - 5 million (US$45,045)
0.25%
5 million - 10 million (US$90,090)
0.50%
Over 10 million (US$90,090)
1.50%
Source: Global Property Guide

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